Credit Card Act of 2009: Act I, Scene 1

A few months ago, Legal Bytes noted the progress of the Credit Card Act of 2009 (the “Act”), and when it was signed into law, we updated that blog post with a note about the inclusion, for the first time in federal law, of coverage of gift cards.

Today, some of the credit card protections the Act affords consumers go into effect. First, credit card bills must be mailed to the consumer at least 21 days before payment is due. Second, significant changes to the rates or fees that apply to credit cards can’t be implemented unless consumers are given at least 45 days’ notice. In both cases, this represents an elongation of the prior regulations (14 days and 15 days, respectively). 

Provisions of the Act also in effect now prohibit credit card issuers from raising their fees and interest rates without any notice if a credit card account holder fails to make a payment on time or goes over their credit limit. In most cases, such a charge would have required approval from the issuing institution anyway.

Most of the other significant provisions of the Act come into effect next February (e.g., restrictions on increases in interest rates for existing credit card balances), and by July 2010, the Federal Reserve Board is to have crafted and approved new rules covering consumer disclosures (i.e., advertising, application forms, etc.).

If you need to know more about compliance and credit cards—offline or online—contact me (Joseph I. Rosenbaum) or the Rimon attorney with whom you regularly work. We are happy to help.